Hey Guys
The past months as I have written before I am trying to diversify and look more steady assets to invest and when I begun the first question it came to my mind was what kind of assets should I invest.
Alright, let’s talk about productive and non-productive assets. You’ve probably heard these terms thrown around in Youtube, but what do they actually mean, and more importantly, how can you make money with them?
What Are Productive Assets?
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Productive assets are the must haves of your investment portfolio. Why? Because they generate income! These are assets that, once you invest in them, will pay you back over time through interest, dividends, or even rent.
Examples? Stocks, real estate, and businesses.
Stocks: When you buy shares in a company, you’re essentially owning a piece of that company. Over time, this can pay off in two ways: the stock price goes up (capital appreciation), or the company pays you dividends (direct income).
Real Estate: Whether you own a rental property or invest in real estate funds, real estate can generate monthly income in the form of rent. Plus, property values tend to rise over time, so you’re looking at potential appreciation as well.
Businesses: If you own or invest in a business, this is the ultimate productive asset. The business generates revenue, and you get to keep a chunk of that.
What Are Non-Productive Assets?
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Now, non-productive assets? These are the ones that look shiny but don’t really do much for you. They don’t generate any income, and their only value comes from what someone else will pay you for them in the future. They might go up in price, but there’s no guarantee.
Examples? Gold and Silver
Gold: People love gold because it’s a safe haven. But here’s the catch—gold just sits there. It doesn’t pay dividends, it doesn’t generate rent, and the only way to profit from it is by hoping its price goes up because someone wants to have it .
Silver: Silver is the same as gold and @trumpman and the #silvergoldstackers community are trying to amass loads of it.
Where Do You Make the Most Money?
Here’s the deal: productive assets tend to give you the best returns over time. Stocks, for instance, have historically returned about 7-10% annually over the long run. Real estate can also be a solid performer, offering both rental income and appreciation.
Non-productive assets? They can be part of a diversified portfolio, but they’re more speculative. Gold has historically returned less than 3% annually—much lower than stocks. Plus, when you hold onto non-productive assets, you lose out on potential income.
So, How Do You Invest in Them?
At this point, it’s simple for me: I’m buying stocks that pay dividends, have strong fundamentals, and are highly profitable. When you have that, the dividends are usually around 4-5% per share, and the stock price return is about 10% per year, which is great. It gives me peace of mind.
But because I love gold, I will also keep stacking it. I love how it shines, and if everything falls apart, gold will always be something others are willing to trade.